By Petchanet Pratruangkrai

Farmers and traders stand to lose business as they face a serious challenge from many foreign firms, mainly Singaporean, which have set up rice-trading operations and plantations here under Asean seamless trade.

"Although rice farming and trading are limited to Thais under the Foreign Business Act, many foreigners can easily rent or own land for raising rice and conducting a rice-trading business in the Kingdom," a rice trader said yesterday.

At a Commerce Ministry seminar on creating a strategy linking local and global businesses, Thai rice exporters urged the government to protect Thai rice-cultivating areas and the trading business from alien residents by urgently checking the ownership of rice plantations and the certificates for running a trading business.

The source said many Singaporean and some other foreign traders are now taking advantage of a loophole in Thai laws to purchase land suitable for paddy fields and starting up rice-trading houses in Thailand.

Those foreign investors tend to be Singaporeans, as they can easily come here to do business since their country is one of the Asean members, the source said.

The Asean Economic Community has now created challenges for Thai rice farmers and traders. Singaporean investors are exploiting free trade within Asean to deal in the grain, which should be restricted to Thais, he said.

Two years ago, the ministry reported that some foreign investors particularly from the Middle East had tried to purchase paddy fields in Thailand. However, the government, through the Department of Special Investigation and the Business Development Department, has not yet managed to investigate the circumstances.

Korbsook Iamsuri, president of the Thai Rice Exporters Association, said some Thai rice exporters are now not Thai, while some foreign rice exporters want to join the association as members.

She said Asean integration was a two-edged sword for the Thai rice industry, as it has encouraged Thai exporters to expand to other Asean nations, while foreign traders can easily penetrate the market here.

A study by the Thailand Development Research Institute (TDRI) showed that the lack of value-chain development in rice farming and loose cooperation between government agencies and rice traders had left Thai rice production and industry less competitive and less developed than in the past decade.